New Mexican platform scheduled to debut in third quarter of fiscal 2014.

BakingBusiness.com,
10/23/2013

by Eric Schroeder

DALLAS — Brinker International, Inc. is “dialing up intensity on product innovation” in an effort to drive sales and bolster results at its Chili’s Grill & Bar restaurant chains, said Wyman Roberts, president and chief executive officer of Brinker.

In an Oct. 23 conference call to discuss fiscal 2014 first-quarter results, Mr. Roberts said newly installed kitchens at many Chili’s restaurants have opened the door to new menu items, including flatbreads and pizzas. By the third quarter of this year the restaurant chain will utilize the kitchens to enhance another part of its platform: Mexican food.

“Our research has shown that we can build upon our current credibility with tacos, fajitas, quesadillas, chips and salsas to further strengthen this platform,” Mr. Roberts said. He noted that Mexican actually represents the biggest category at Chili’s, bigger even than burgers.

“The work we are doing is exciting,” he said. “It is bringing not just new news, but also we are going to improve the quality of the products that we already have. So we have a new news message as well as some real innovations that are going to help raise the quality of the product we are delivering today.”

While consumers will need to wait several more months before the Mexican platform takes shape, Mr. Roberts stressed that in the meantime Chili’s will not be content to rest on its laurels when it comes to food.

“We will drive relevance with our guests by innovating and renovating our menu,” he said.

He mentioned several new product launches this year, including new entrees, desserts and alcoholic beverages. The company also capitalized on the pretzel bread craze with a bacon avocado chicken sandwich served on a toasted pretzel roll.

“It has become the best-selling sandwich on our menu,” Mr. Roberts said.

Comparable restaurant sales at Chili’s in the first quarter of fiscal 2014 ended Sept. 25 fell 1.6%, as a 3.4 percentage point decline in traffic more than offset a 0.9 point gain in both pricing impact and mix-shift.

Comparable restaurant sales at Brinker’s other major restaurant chain, Maggiano’s Little Italy, increased 0.6% behind a 2.1 point gain in mix-shift and 0.6 point benefit from pricing impact, which more than offset a 2.1 point decline in traffic.

Net income at Brinker totaled $29,212,000 in the first quarter ended Sept. 25, equal to 44c per share on the common stock, up nearly 5% from $27,864,000, or 38c per share, in the same period a year ago. Total revenues increased narrowly to $683,924,000 from $683,507,000.